Labour ‘could force landlords to reduce rents’

A Labour government would provide local authorities with the power to force landlords in the private rented sector (PRS) to cut the rental rates for their properties.

This is according to shadow work and pensions secretary Liam Byrne, who was speaking to the BBC ahead of a speech from Ed Miliband today (June 6th) in which the Labour party leader is expected to pledge to reduce the welfare budget if it wins the next general election.

Crackdown on landlords

Mr Byrne insisted that one of the major ways his party would look to cut benefit spending would be to limit rents.

“A lot of people say to us why are we spending £24 billion on housing benefit – a lot of that money is going to private landlords,” he stated, adding: “Why don’t we give local councils the power to bring down the cost of rents, particularly in the private rented sector?”

The MP also added that this money may then be used to create more social housing, which could provide a further blow to landlords by potentially reducing the demand for rental properties.

Receding stigma

These comments come just days after research was released revealing that landlords are increasingly willing to let properties to tenants who are receiving housing benefit, suggesting that attitudes are changing in this area.

A survey conducted by Dssmove discovered that although three-fifths (61 per cent) of property owners would be worried about not receiving rent payments from a tenant claiming Local Housing Allowance (LHA), three-quarters would be happy to take on such a renter if this was not a consideration.

In a display that perhaps suggests attitudes towards LHA tenants is changing, more than half of respondents said they do not believe those receiving housing benefit are any more troublesome than private tenants, while just one-third admitted they would be concerned about fraud or criminal activity.

Aki Ellahi, founder of Dssmove, said: “Attitudes to LHA tenants are changing. More and more landlords and agents can see the commercial benefits of letting to LHA tenants.”